We assign a fundamental rating of 6 out of 10 to CLS. CLS was compared to 123 industry peers in the Electronic Equipment, Instruments & Components industry. While CLS has a great profitability rating, there are some minor concerns on its financial health. CLS has a decent growth rate and is not valued too expensively.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CLS had positive earnings in the past year.
CLS had a positive operating cash flow in the past year.
Of the past 5 years CLS 4 years were profitable.
CLS had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

CLS's Return On Assets of 10.85% is amongst the best of the industry. CLS outperforms 91.87% of its industry peers.
The Return On Equity of CLS (35.33%) is better than 95.94% of its industry peers.
CLS has a Return On Invested Capital of 21.33%. This is amongst the best in the industry. CLS outperforms 96.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CLS is above the industry average of 8.81%.
The last Return On Invested Capital (21.33%) for CLS is above the 3 year average (11.43%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	10.85%
ROE	35.33%
ROIC	21.33%

ROA(3y)4.63%

ROA(5y)3.55%

ROE(3y)15.02%

ROE(5y)11.3%

ROIC(3y)11.43%

ROIC(5y)8.93%

1.3 Margins

The Profit Margin of CLS (6.35%) is better than 72.36% of its industry peers.
CLS's Profit Margin has improved in the last couple of years.
CLS has a better Operating Margin (7.33%) than 71.54% of its industry peers.
In the last couple of years the Operating Margin of CLS has grown nicely.
CLS has a worse Gross Margin (12.04%) than 76.42% of its industry peers.
CLS's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	7.33%
PM (TTM)	6.35%
GM	12.04%

OM growth 3Y24.27%

OM growth 5Y29.03%

PM growth 3Y34%

PM growth 5Y30.13%

GM growth 3Y8.03%

GM growth 5Y10.39%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

CLS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
There is no outstanding debt for CLS. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

CLS has an Altman-Z score of 6.97. This indicates that CLS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CLS (6.97) is better than 82.11% of its industry peers.
CLS has a debt to FCF ratio of 1.97. This is a very positive value and a sign of high solvency as it would only need 1.97 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.97, CLS is in the better half of the industry, outperforming 78.86% of the companies in the same industry.
A Debt/Equity ratio of 0.37 indicates that CLS is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.37, CLS perfoms like the industry average, outperforming 40.65% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.37
Debt/FCF	1.97
Altman-Z	6.97

ROIC/WACC2.67

WACC7.98%

2.3 Liquidity

CLS has a Current Ratio of 1.47. This is a normal value and indicates that CLS is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of CLS (1.47) is worse than 75.61% of its industry peers.
A Quick Ratio of 0.88 indicates that CLS may have some problems paying its short term obligations.
CLS's Quick ratio of 0.88 is on the low side compared to the rest of the industry. CLS is outperformed by 85.37% of its industry peers.
CLS does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.47
Quick Ratio	0.88

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 54.59% over the past year.
CLS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 43.67% yearly.

EPS 1Y (TTM)54.59%

EPS 3Y46.94%

EPS 5Y43.67%

EPS Q2Q%70.27%

Revenue 1Y (TTM)N/A

Revenue growth 3YN/A

Revenue growth 5YN/A

Sales Q2Q%43.57%

3.2 Future

Based on estimates for the next years, CLS will show a very strong growth in Earnings Per Share. The EPS will grow by 33.06% on average per year.
The Revenue is expected to grow by 28.15% on average over the next years. This is a very strong growth

EPS Next Y38.59%

EPS Next 2Y37.93%

EPS Next 3Y33.06%

EPS Next 5YN/A

Revenue Next Year32.94%

Revenue Next 2Y32.93%

Revenue Next 3Y28.15%

Revenue Next 5YN/A

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 46.37, the valuation of CLS can be described as expensive.
CLS's Price/Earnings is on the same level as the industry average.
CLS's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.30.
Based on the Price/Forward Earnings ratio of 33.46, the valuation of CLS can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as CLS.
The average S&P500 Price/Forward Earnings ratio is at 25.57. CLS is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	46.37
Fwd PE	33.46

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as CLS.
The rest of the industry has a similar Price/Free Cash Flow ratio as CLS.

		Industry Rank	Sector Rank
P/FCF	81.18
EV/EBITDA	35.37

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of CLS may justify a higher PE ratio.
CLS's earnings are expected to grow with 33.06% in the coming years. This may justify a more expensive valuation.